FSB Policy Chairman Martin McTague said: “The vast majority of small firms still bank with the big four lenders.

“Concentrating so much of the market in the hands of so few financial giants is not good for anyone. In the current climate, too many small businesses overpay for banking services.

“The delayed rollout of the RBS remedies has been really frustrating for small firms and challenger banks alike. We were originally told the process of getting these funds out to lenders would start earlier this year, now we’re told no-one will receive any funding until next year at the earliest.”

The banking group currently intends to shut more than 50 RBS branches and just under 200 NatWest branches.

The FSB says this is frustrating for its members.

Mr McTague said: “More than 90 per cent of our members bank online.

“But there are plenty of instances where you simply have to visit a branch in-person – you can’t deposit physical cash over the web.

“Small businesses are embracing different banking methods and welcoming the potential of Open Banking to transform the payment landscape. It’s the sheer pace of closures that’s devastating vulnerable communities right across the country.

“RBS needs to invest to ensure that all of its customers have access to the banking services they need.”

Mr McTague said everything possible needed to be done to ensure that there was a responsible lending climate run by the right people.